Heritage Foundation Leadership for America

Reuters goes gaga over a new report from the CBO. Reuters' lead:

President Bush's tax cuts have transferred the federal tax burden from the richest Americans to middle-class families, with one-third of them benefiting people with the top 1 percent of income, according to a government report cited in newspapers on Friday.

Let's take a look at how the 'transfer' is going.

The Richest Americans
According to the CBO report, the top 20 percent of income earners would have paid 64.0 percent of federal taxes in 2004 without the Bush tax cuts. As it is, with the Bush cuts, they will pay 'only' 63.5 percent. And what happens in 2005? The top earners would have paid 64.0 percent of federal taxes but now, because of this egregious 'transfer,' will pay only 64.3 percent (no sic!), which to our reading looks like an increase in tax burden.

The proportion of federal taxes that will be paid by the top 20 percent of earners is higher under the Bush tax cuts from 2005 through 2010, according to the CBO report that Reuters purportedly cites. From 2011 through 2014, as far into the future as the report projects, the top 20 percent of earners will pay, under the Bush tax cuts, the same proportion of federal taxes that they would have without the Bush tax cuts.

Middle Class Families
Now let's look at the middle 20 percent of earners. In 2004, they would have paid 10.4 percent of federal taxes without the Bush cuts. With the cuts, they will pay 10.5 percent of federal taxes. Note, however, that because of the cuts, the federal tax burden for the middle 20 percent of earners dropped from 16.5 percent to 14.6 percent. In other words, these earners are paying a slight bit more of federal taxes, but a lot less in federal taxes. In other words, their taxes were cut.

The proportion of federal taxes that will be paid by the middle 20 percent of earners is slightly higher (one-tenth of a percent) in 2004 and 2006. The proportion of federal taxes that will be paid by the middle 20 percent of earners is lower in 2005, 2008, 2009, and 2012. It is unchanged in the other years through 2014, as far into the future as the CBO report projects.

To Summarize
From 2005 to 2010, the tax cuts that Reuters reports have "transferred the federal tax burden from the richest Americans to middle-class families" raise the comparative tax burden for the richest Americans and lower the burden, a bit, for middle-class families. Throughout the time period, the actual tax burden on both groups is reduced.

And it's not just Reuters. The Post, for example, headlines "Tax Burden Shifts to Middle," which is a good headline, if false

Don't believe us?
You don't have to. Click here (PDF link) for the CBO report and look at 'Table 4' on page 13.